sell the news?

[boarderbloke]

Very bullish USDA export report this morning, but intially a lot of selling. Seems like it might be starting to turn around though.
Local elevator went positive on basis $5-7 this morning nearby, inversion holding.
Seems no demand rationing yet.
Those with unpriced canola, is it time now to let it go before break-up, or will July set crop year highs?(don't forget about dryness in the USA)

[fjlip]

Down on bullish news is a bad omen, see how markets close. Must be more profit taking/ resistance on charts.

[crusher]

Old crop futures around $600 and new crop around $550. Those are decent numbers. Errol was thinking we would hit $500 Nov before $600. We've spent alot more time under $550 lately. But then we could have some buying of acres around the corner. Lots of factors.

If it was easy everybody would be doing it!

On a side note did someone mention OneEarth was mothballing their farm operation?

[charliep]

Is it a year you want some options strategies/minimum price contracts in your pocket?

[errolanderson]

crusher . . . some American analysts suggest that soybeans might take another run toward $15/bu again on Argentina dryness. If they are right, canola futures might pop $610/MT plus temporarily. Likely a solid cash market pricing opportunity if that happens.

Personally, don't buy into South American crop problems anymore. Soybeans are an amazing plant. Record-breaking South American crop appears in the mix.

Suspect growers may be gun shy protecting prices this year because of last year's price run-up. This may be the year for protection as no two years are the same. Also, consider the possible strength of the loonie.

[BTO_farmall]

errorhead@ProMarketWeird



Argentine ag risks underestimated - Morgan Stanley




South America's prospects for replenishing world corn and soybean pipelines may be less strong than investors believe, Morgan Stanley said, cautioning that weather indeed significant risks to supplies.

The comments come amid a revived market focus on weather risks to South American crops, which the world is relying on to replenish stocks dented by poor harvests in the region and the US last year.

"The market is underestimating the risk that Argentine production shortfalls could pose to global prices," the bank said, flagging the risk to yields from late sowings.

"By the first week of December, only 55% of the nation's corn crop was planted, down from 68% last year," a delay - caused by persistent rains - which "will materially reduce the country's corn yield potential".

"Yields in corn planted after the middle of November average at least 1 tonne a hectare lower than in corn planted before that window."

'More vulnerable than usual to dryness'

Furthermore, "adding insult to injury", weather has turned worryingly drier this month in western Argentina, responsible for roughly one-third of domestic corn and soybean output, leaving soil moisture levels below 20% of capacity and with little moisture in the forecast..

"This comes just as late-planted corn enters pollination, the point in the crop's development when yields are set and when moisture is most critical.

"Our local contacts have also expressed concern that the wet start to the season discouraged adequate root depth, leaving crops more vulnerable than usual to dry weather today."

The bank estimated Argentina's corn harvest at 23.5m tonnes, well below the "optimistic" forecast of 28m tonnes from the US Department of Agriculture, whose data are closely watched by investors.

"This leaves nearly 3m tonnes less corn available for Argentina to export in 2012-13."

Brazilian dryness

For Brazil, Morgan Stanley voiced concern over the dearth of soil moisture in north eastern areas, in the grip of a two-year drought.

"Dryness in these states has been less of a market focus to date, since they fall outside of the country's main agricultural belt.

"However, with the region responsible for 16% of the country's corn acreage, attention is necessary."

Soybean risks

And the bank cautioned over investors ideas of a record Brazilian soybean crop, of more than 80m tonnes, being "overtly bearish" for prices, in signalling weaker demand for US shipments.

"We contend, by contrast, that an 80m-tonne crop is not sufficient to materially pressure US soybean prices from current levels.

"In fact, we believe the US balance needs no less than an 80m-tonne soybean crop, to keep the stocks-to-use ratio above record lows."

Morgan Stanley estimates flagged the need for Brazilian soybean exports of 39.4m tonnes, and Argentine shipments of 10.6m tonnes, "just to reach global equilibrium".

"If either country's production falls below our forecasts, stocks-to-use would fall to untenable levels."

[bucket]

"Our local contacts have also expressed concern that the wet start to the season discouraged adequate root depth, leaving crops more vulnerable than usual to dry weather today."


Pretty important takeaway from that article.


Most farmers and maybe some expert analysts understand that statement.

[BTO_farmall]

This is What I find an even More Important Takeaway from That Article......


"We contend, by contrast, that an 80m-tonne crop is not sufficient to materially pressure US soybean prices from current levels.

"In fact, we believe the US balance needs no less than an 80m-tonne soybean crop, to keep the stocks-to-use ratio above record lows."